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Collateral settlements using blockchain: JPMorgan

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Pavan A Follow


Jun, 02 2022

Jun, 02 2022

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As blockchain usage in finance increases, JPMorgan is preparing to offer related services. A blockchain-based collateral settlement has been implemented recently.

In the pilot transaction, two of JPMorgan's entities transferred a tokenized representation of Black Rock Inc. money market fund shares on May 20.

The bank said it plans to offer investors a wide range of collateral for its private blockchain.

Ben Challice, global head of JPMorgan's trading services, said BlackRock didn't participate as a counterparty, but it has been heavily involved.

He said, “What we’ve achieved is the friction-less transfer of collateral assets on an instantaneous basis.”

Adding, “since day one and are exploring the use of this technology.”

Since the establishment of Onyx Digital Assets (ODA) late in 2020, JPMorgan has been actively involved with crypto and blockchain. The project is known as a "blockchain-based network that enables the processing, recording, and delivery-versus-payment (DVP) exchange of digital assets across asset classes," it is described as a network for transacting across asset classes.

In the short run, tokenized collaterals will soon be offered for equities, fixed income, and other types of trades as well. Right now, tokenized collaterals are used for derivatives, securities, and repo trading.

The firm's goal is to not only provide the needed support needed by blockchain users but also to provide all the related services needed.

In recent months, JPMorgan has become very bullish about cryptos and blockchains. The firm recently issued a $38k price target on Bitcoin, while expecting it to reach $150k in the long term.





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Pavan A

CBW - External Analyst


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